1. Liposomes which contain concentrated fluorescent dyes have been used to assay surface-active peptides. The mechnanism of fluorescence quenching has been studied with absorption and fluorescence spectroscopy and lifetime measurements, and is atrributed to ground state aggregation. Dyes other than 6-carboxyfluorescein, such as rhodamine and pyrene derivatives, have been found to exhibit this behavior and should be useful in the liposome system. 2. The fluorescence lifetime and anisotropies of individual dye labels attached to proteins were determined by synthesizing conjugates of differing degrees of substitution and subtracting the single photon lifetime data. The procedure can resolve more lifetimes than the purely mathematical approach. 3. The precision of relaxation times measured by the static depolarization method was calculated as a function of the lifetime/relaxation time ratio, the photometric precision, and the limiting polarization. Optimal experimental conditions, as well as the feasibility of given experiments, can be predicted.